Software AG punts on XML for the future

Relying on a bright future for Extensible Markup Language (XML), Software AG yesterday announced a set of tools and products designed to help companies develop and implement XML-based Web applications.

The German systems software vendor also announced partnerships to bundle its new XML-based products with those of other vendors. XML is a specification for formatting data for Web pages.

Software AG will demonstrate the capabilities of the new software family, which it is calling Xenon (XML Enabled Open Network), at the CeBIT trade fair in Hanover next month, and expects to ship it in the third quarter, company executives said at a press conference here yesterday.

"XML is the key enabler for e-business," said Erwin Konigs, chairman and CEO of Software AG.

XML will significantly simplify business-to-business applications over the Internet, because companies' internal applications, when converted to XML, can more easily communicate with one another, Konigs said.

· X-Bridge -- software that enables users to integrate their current applications into new Web applications, by "wrapping" or converting them into an XML format.

· X-Machine and X-Node -- two components of Software AG's Tamino product, which are already on the market. X-Machine is an information server that stores XML documents. It offers "native" support for XML, which means that it stores data directly in XML format. X-Node is a data filter that makes it possible for companies to access existing databases, so they can, for example, embed that data in an XML document.

Chris Horak, Software AG's director of worldwide marketing, acknowledged that companies can download many of the same types of XML products from individual companies via the Internet. But Software AG sees it as more convenient for companies to draw on one comprehensive set of products, he said.

Software AG also announced strategic partnerships to market and sell XML-based products. The company announced a partnership with Santa Cruz Operation (SCO) to deliver an XML-database for Unixware 7, the California-based company's version of the Unix operating system, in the third quarter.

Software AG also has taken a 27 per cent stake in The Reference NV, a Belgian company that develops Web applications, and announced a partnership with North Carolina-based Extensibility, under which it will bundle Extensibility's XML Authority -- a product that helps catalogue documents -- with Tamino, as of this quarter. It also struck a deal with the Canadian company SoftQuad to sell Tamino with XMetaL, the company's tool for editing XML documents.

Software AG executives were keen to tout the advantages of XML, which describes more about the data than the current Web formatting language, HTML, thereby making it easier to conduct intelligent searches over the Internet.

Browsers are "dumb", said Horak, referring to the common method of finding information using browser software. "XML isn't a search engine, it's a find engine," he quipped.

Software AG may also strike partnerships with ERP (enterprise resource planning) vendors to help "Webify" their offerings, Konigs said in response to a question. At the same time, Software AG will compete with ERP vendors that try to do their own integration.

ERP vendor JD Edwards has held discussions with Software AG on making its Web solutions XML-compatible, Konigs said. He also said his company has held "technical discussions" about an XML platform for SAP's R/3, but could give no further details.

But the purchase of an ERP vendor is not on the cards, Konigs said. "We don't want to be in the end-user business," he said.

Software AG's new direction over the past two years has produced results, moving it from a loss-making, also-ran systems software company to one that this week announced record-breaking earnings. It is not yet clear, however, whether the improved profit and revenue picture stems from the company's new line of products, which includes Tamino, the programming language Bolero and EntireX middleware.

Software AG will give a more detailed financial report on February 18.

The company believes it has profited from the decision two years ago to bet on XML, Horak said.

"We took a risk then, and now we are well-positioned," Horak said.

One analyst partly agrees with that assessment. "Tamino is ahead of its time, and Software AG was right to pick up on the importance of XML," said Gary Barnett, a London-based senior consultant with Ovum, an independent research company.

But it's still early days for XML, he said. "We're still at the talking stage, and not yet at the doing stage." The problem is that it is not yet clear whether the market will do a 90-degree turnaround, and the role that XML plays could change, he said.

However, Barnett is still optimistic for XML's prospects as a language to enable open communications. For companies to convert their systems to an XML format is not a "trivial task", and XML is neither the worst nor the best formatting language, Barnett said. What distinguishes it from other similar doomed efforts -- such as the pre-Web EDI (electronic data interchange) movement of the early 90s -- is that XML has massive vendor support, Barnett said, noting that Microsoft is playing a positive role in the process of coming up with open standards for XML.

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